Smoothie King
Smoothie King offers customizable smoothies and bowls with whole fruits and organic vegetables. Known for promoting healthy lifestyles, it plans to expand its menu with new food items. Part of the quick-serve restaurant industry.
About Smoothie King
Smoothie King Franchises Inc. is an American privately held company that operates a chain of retail stores that specialize in selling smoothies. Founded in 1973, the company was bought by South Korean franchisee Wan Kim in 2012. In the late 2010s, the company was focusing on whole and unmodified ingredients.
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Smoothie King franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for opening a Smoothie King franchise includes the Initial Franchise Fee and other costs. For a Traditional location, the Initial Franchise Fee is $30,000 for new franchisees or $25,000 for existing franchisees in good standing. This fee does not include additional costs like grand opening marketing, which must be spent according to specific requirements. [p.27, p.16, p.25]
What is the initial franchise fee?
The initial franchise fee varies based on whether it's for a first franchise or subsequent franchises. For the first franchise, the initial franchise fee is $30,000, while for the second and any subsequent franchises, it is $25,000 [p.211].
What are the ongoing royalty and advertising fees?
The FDD indicates that you must make minimum royalty payments regardless of sales levels [p.5]. Additionally, a portion of these funds goes towards the National Marketing Fund, which is used for promoting the Smoothie King brand and system [p.39, p.168]. However, specific amounts for ongoing royalties and advertising fees are not detailed in the provided excerpts.
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement's term length isn't specified in these excerpts. However, according to [p.211], Developer can obtain one renewal term upon execution of the franchise agreement.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you can transfer your franchise interest to a corporation, limited liability company, or limited partnership formed for convenience of ownership. However, Franchisor's consent is required, which is subject to certain conditions such as owning at least a majority of the total voting power in the new entity [p.174]. Additionally, there are transfer fees: no fee for the first transfer and $500 for subsequent transfers [p.22]. Good cause can also be considered by the Franchisor when refusing to permit such a transfer [p.6].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if the franchisee fails to comply with any lawful provision of the franchise agreement and does not cure such failure within a reasonable time frame, which cannot exceed 30 days [p.6].
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a franchisee, you must meet one of the following criteria: - Have a total net worth in excess of $5,000,000 [p.50]. - Be an individual guarantor with an individual or joint (with spouse) net worth exceeding $1,000,000, excluding personal residence and retirement accounts, and have a joint annual income with your spouse over $300,000 for the past two years, expecting to maintain that level in the current year [p.50].
Do I get an exclusive or protected territory?
No, you do not get an exclusive territory. Your Protected Territory is only applicable for Traditional locations and does not provide protection against competition from other franchisees, Smoothie King-owned Units, or other competitive brands within your area [p.46, p.45]. Additionally, Smoothie King reserves the right to establish alternative channels of distribution or operate competing businesses in your territory [p.47].
What training and ongoing support does the franchisor provide?
The franchisor provides initial franchise management training for the first, second, or third unit at no cost, which includes on-site assistance from a Smoothie King representative for up to 5 days [p.37]. Additionally, the franchisor offers other training programs and ongoing support such as site selection review, construction cost administration, training, and administrative support related to each anticipated future opening [p.133]. For ongoing operations, franchisees are responsible for their employees' training costs, but the franchisor may charge reasonable fees for materials or participation in training courses [p.159].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 30, 2024, there were 1,060 franchised Units open out of a total of 1,201 Units (including those operated by Smoothie King), with 35 Units permanently closing during the reporting period. [p.60]
Does the franchisor share any financial performance or earnings information?
The franchisor shares historical financial results based on information submitted by franchisees [p.59]. However, neither the franchisor nor an independent certified public accountant has independently audited or verified this information [p.59]. The franchisor also provides average and median Net Sales percentage increase for franchised Units based on a comparison of Net Sales for a comparable period in both years [p.66]. This information is derived from units that were open daily during the reporting period or closed for less than an 8-week period [p.66, p.60, p.63].
What am I restricted to selling, and where must I buy supplies?
You are not restricted as to guests to whom you may offer goods and services [p.51]. You must purchase certain branded inventory products from Performance Food Group/Roma or Smoothie King's designated foodservice distributors, including frozen fruits and vegetables, proprietary mixes, and other ingredients [p.28]. This is in addition to the requirement to buy some supplies from PFG/Roma even if not strictly required by Smoothie King [p.28].